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Single Invoice Finance is a Game Changer

invoiceWhen asked to describe single invoice finance, entrepreneurs and business owners will refer to it as a certified game changer.

The method, a financing option used to release cash locked up in receivables or invoices, is done either by selling the rights of collection on an invoice (factoring) or by using it as a form of security or guarantee (discounting) in exchange for an advance of its value.

Take note that spot, selective or single invoice finance only involves one receivable instead of an entire bulk. It is a onetime transaction and does not cover an entire period’s worth be it weekly, monthly or annually. Because of this, the fee is likewise a onetime thing. There are no lengthy contracts which make it a very flexible solution for businesses that need a fast and fuss-free funding option.

Although single invoice finance can be broken down into factoring and discounting, the benefits are still more or less the same, as follows.

  1. It improves cash flows as it converts and frees up any locked up cash from a customer invoice. This not only helps provide immediate cash for use but also aids in the liquidity of the company.
  2. It does not affect the liabilities portion of the balance sheet making way for more attractive financial statements and lesser debts to worry about. It is an asset transaction which reflects as a decrease in trade receivables and an increase in cash. An expense account shall likewise be debited to reflect the onetime fee.
  3. It does not involve any interests or property collateral. Why? Refer to the above. Because of this, even smaller businesses can make use of the method. Startups, small to medium scale enterprises and even recovering entities can get hold of single invoice finance.
  4. The fee is fixed and agreed upon at the onset of the transaction. This makes it far more cost effective as a funding medium for entrepreneurs. Both parties shall come into agreement as to the percentage of the invoice value to be received by the financing provider. Oftentimes, this is anywhere from 10% or less.
  5. It provides a quick injection of cash. No more waiting just as you would other financing options. Funds are released real quick even in as fast as twenty-four hours or a day’s time. No other alternative comes close or is as fast as single invoice finance.

Export Finance and Why It’s For You

export-financeAs businesses seek to grow and various enterprises aim for global expansion, the need for export finance has increased exponentially. Although there are various other funding methods available in the market, entrepreneurs have continuously sought it for its benefits.

Ever wondered if export finance is for you too? Well, take a look at this list and discover for yourself.

1.    Free of Bias
Unlike other forms of financing, it remains relatively unbiased in a sense that it’s not exclusive to established companies. Startups, small to medium scale enterprises, conglomerates and even recovering entities alike can make use of it. This is because providers bank not on the business’ creditworthiness but instead that of the customer to whom the export sales invoice/s is attached to. This brings us to our next point.
2.    Zero Collateral
Export finance is very useful for entrepreneurs who do not pass the usual standards and asset level requirements that other options require. For startups most especially, property collateral can be a huge problem because they are still at the infancy of their operations. There’s not just enough assets to constitute as collateral. Luckily, the method doesn’t require one.
3.    Faster Collections
Most importers and foreign customers choose to defer payment. Oftentimes, these transactions fall under sales on credit and actual cash payment is only received upon complete delivery or until goods have been resold by said importer. This creates receivables, which although are assets, lock up cash in invoices for prolonged periods making them unavailable for immediate use. Export finance allows the advance of their values prior to maturity thereby releasing cash almost instantaneously and improving liquidity and working capital in the process.
4.    Lesser Risks
Another daunting feat that many exporters face is financial risks. There’s credit risk which pertains to possible losses due to late or no collections, interest rate risk that refers to the fluctuation of rates in the market and foreign currency risk that can signify losses due to the rise and fall of exchange across currencies. Because of the advance, export finance helps avoid and minimize all these.
5.    Cost Savings
Last but not the least, export finance allows companies to save not only bucks but also effort. Because providers will not only provide an advance of the invoice values but will likewise take care of administrative duties like collection, entrepreneurs get to save on the additional costs that would otherwise be necessary for those tasks.
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Single Invoice Discounting Tips

Business partners handsFinancing options of all kind come with their fair share of pros and cons. Their applicability, however, is not one and the same for all as companies come with varying needs and are a combination of various factors combined. Furthermore, it’s crucial that such methods are used properly otherwise their benefits would remain futile and so today we’re dishing out some Single Invoice Discounting tips to get everyone on the right track.

Understand how it works. Single Invoice Discounting is a type of receivables financing wherein cash is drawn up against a specifically chosen sales invoice. A cash advance is received by the company from the provider with the latter getting the invoice as security. The company goes on to use the funds as it deems fit and waits for its maturity to collect from the owing customer, after which it then goes off to pay the provider of the resources received in advance. This is the simplest and shortest way of putting things into perspective but if you’re planning to use it make sure to dig more and research to fully understand it and be able to address as to whether or not it’s the best option.

Screen customers to whom credit is extended. Since the method draws funds from sales invoices which are a result of a credit sale, it is therefore a must that the company already has strong and effective credit management procedures and terms. One of the important aspects to pay attention to would be credit screening. Make sure to extend credit only to those that are worthy and capable of repaying the debt at maturity. Don’t lean towards loose and lenient credit requirements and processes either. If an invoice is poor and the customer is not creditworthy, the Single Invoice Discounting provider may reject one’s application.

Only transact with trusted providers. Perform research, run background checks and look for reviews and feedback. Finding the best Single Invoice Discounting firm is just as crucial as determining which funding option to go for. Even if the method is beneficial, majority still lies on the quality of the service provided.

Opt for a confidential arrangement. Single Invoice Discounting can either be disclosed or confidential. Preference is the underlying concept here but if we were to suggest, we’d recommend the latter. This is to avoid any confusion in terms of collection in the perspective of the customer to whom the invoice is attached to.

Export Funding: Pass or Go?

export fundExport Funding is a type of financing that has gained so much traction and following as it helps businesses go into the foreign trade without being weighed down by the strings and risks that usually attach to it.

When planning to export one’s goods, businesses need to factor in a lot of elements. This includes having to face the additional financial risks (e.g. credit, foreign exchange, interest, etcetera), the additional operational costs, collection burdens and country specific laws to name some. These alone are enough to terrify entrepreneurs and make them resign back to their domestic operations.

That should not be the case. There is a way to manage all that risk and burden and that is through export funding. This financial medium allows companies to work alongside a financial institution that shall bear the collection responsibility, have country specific market knowledge and expertise thereby avoiding the financial risks all while providing the advance to an export sales invoice.

In a way, this is akin to factoring but on an international scale and with added merits. Some providers can even arrange to release the invoice themselves to do away with language barriers and abide by the laws and regulations of specific nations. Plus, the fact that companies need not spend on a new office space and added labor is a huge advantage.

Furthermore, the advancing of the invoice value allows for entities to hasten their collection and not hurt its cash flows and working capital. Its cash grows as sales increases and money would be made immediately available and not stuck within the customer invoices. Remember that importers tend to defer their payments up until the goods have been delivered to their doorstep or until they have been resold. This can leave exporters with heaping piles of receivables which can be a problem in terms of liquidity.

At the same time, the chance to go into the international market and trade brings in a lot of opportunities. Among others there’s the decrease of seasonal losses, extension of product life cycles, bigger markets, larger sales and profits, lower per unit costs, maximization of asset usage and the list goes on.

Should you pass or should you go for it? That’s a question for you to answer on your own but if export funding is the tool that could help expand and grown your business then we say, why not?

Spot Factoring Versus Bulk Factoring

receivable-factoringReceivables factoring comes in two forms: bulk and spot factoring. Today, we’ll set out the differences and similarities of the two and hopefully help users establish which among them suits their needs best.


Bulk Factoring (BF) – Pertains to the use of customer invoices to draw immediate cash by selling the rights to their collection in exchange for an advance of their value, received before customers send in full payment or a part thereof.

Spot Factoring (SF) – Refers to the use of a specific customer invoice to draw immediate cash by selling the right to collect against it in exchange for an advance of its value, received before customers send in full or partial payment.


BF – Companies that offer credit sales and therefore has trade or accounts receivables in their financial books can make use of the financing method. It is not restrictive so entities regardless of size, status and industry can utilize it.

SF – The same applies.


BF – In this arrangement, all of the entity’s sales invoices for a particular period of time shall be subjected to the factoring method. Their values shall be advanced and collection shall be performed by the factor. It is a long term contract which will last depending on the agreement of the parties involved.

SF – In contrast, spot factoring is a onetime deal. It makes use of only one customer invoice making it a single transaction. It is because of this that it has been dubbed or called as selective or single invoice factoring in other places.


BF – The fee shall cover the long term period stated in the contract and will be a bulk percentage instead of an added up single fee for each invoice.

SF – There is only one fee involved which is dependent on the single invoice used. Because it is a onetime transaction, cost is also a onetime deal.


Despite their differences, both bulk and spot factoring come with similar benefits or perks. First of all, it is a zero liability deal. It is not a type of debt and is in fact an asset transaction where an increase in cash is coupled by a decrease in trade receivables. Second, it is immediate and fast without the usual fuss involved among traditional financing methods. Lastly because it hastens the collection process, it is able to  better cash flows and improve the company’s working capital, allowing it to keep its liquidity or even improve it.

Effects of a Poor Cash Flow

poor cash flowWhen it comes to corporate financial troubles and dilemmas, one of the most common ones would have something to do with the company’s cash flows. As a common problem among various businesses across all industries, it has plagued many businesspeople and entrepreneurs enough for the experts over at the Working Capital Partners to have tons of clients ask them for advice and possible solutions regarding the matter. But for the public in general as well as budding and new entrepreneurs, poor cash flows may sound confusing if not foreign. Worry not as we’re here to help understand what it means and what effects it can bring any company.

But first things first, what does a poor cash flow mean? It is a financial term that basically refers to the total amount of money being transferred into and out of an entity’s funds thereby affecting its liquidity both in the short and long term. Cash inflows may include a return on investment, profits from sale of goods or other income. Cash outflows on the other hand are the entity’s expenditures.

When you say that a company has a poor cash flow, it simply means that there are more funds going out than in or rather more resources are being spent than is being earned. In short, there are more expenses than there are profits. The effects of that can range from being simple and fixable to fatal and deadly which includes the following.

  • A shortage of funds occurs thereby preventing timely payment and fulfillment of obligations to creditors and vendors. This can further lead to tarnished relationship between them and the company.
  • In connection to the above, added interest expenses and penalties as well as a tarnished credit history can be brought about by poor cash flows too.
  • Operations can be put on hold while other projects may have to be completely foregone due to lack of funds or resources to put them into play.
  • The most fatal effect would have to be insolvency where the company can no longer fulfill its obligations as they mature and come due thus liquidation and other forms of business recovery options will have to be considered.

Hopefully, the team at Working Capital Partners has cleared the matter for you. Now allow us to ask a question. How is your company’s cash flow doing?

When to Enter Into Receivables Financing

Receivables financing is considered a kind of asset financing medium which allows business owners to use its receivables in the form of customer invoices to raise its needed capital or resources to fund certain corporate activity or operation.

Factoring Vs Accounts ReceivableHere, the company sells its invoices to a third party financial institution called a factor at an amount that is slightly less than the actual value of the said receivables. This can be as high as eighty five to ninety five percent depending on the agreed terms. The amount can be procured in as fast as twenty four hours. The remaining balance will only be paid once the full amount of the invoices has been collected from the owing customers. This will then be lessened by some discounts which is considered the cost of the financing.

Receivable financing can also be referred to as invoice financing or factoring. Such arrangement can also be divided into two kinds: with recourse or non-recourse.

  • In a “with recourse” arrangement in the vent that the owing customer does not pay their due, the company is required to buy back the invoices from the factor. Here the burden of risk lies on the company.
  • Meanwhile in a “non-recourse” arrangement, the factor bears all risk as they will provide you the amount regardless of whether or not the customer pays their debt.

Now is this financing option good for your business? Here are some cases to consider in determining when you should enter into a receivables financing arrangement.

  1. You have to raise funds but would not want to go into a bank loan or a similar arrangement. A company that lives on debt and liabilities has a financial statement that is not pretty for investors and stakeholders. It can even signal a red flag. Receivables finance gets the benefits of a loan but they do not show up in your liabilities.
  2. You are a new company and applying for loans is both costly and tedious at the moment. Many new business owners find it hard to apply for loans because of the requirements needed. This method isn’t one that requires collateral which most banks need you to have.
  3. Your company has a problem on long outstanding receivables. If you have loads of customers who do not pay their dues on time or not at all then a non-recourse arrangement would be beneficial.
  4. You have to get hold of cash in as fast as possible. As stated earlier, receivables financing institutions can get you the fun in as fast as a day’s time.

Improve Cash Flows with the help of UK Single Invoice Finance Companies

If you own a business or are a high management employee concerned with the finances then this question may have already come to mind: How does one improve cash flows and increase capital without the option of debt and credit? The answer is through UK single invoice finance companies. What are they exactly and what are their services all about?

Now technically there is completely nothing wrong with credits but small and medium scale enterprises should remember to make use of careful balance and where possible avoid it. Even bigger and well established businesses should remember this too. A company with more liabilities than assets and who is funded by debt is not an attractive one in the eyes of investors.

This is where single invoice financing comes in. This financial option allows companies to acquire funds from a single customer invoice. What happens is the business advances the value of such receivable contained in the customer invoice even before the customer makes the payment. It is a one-time only process and is paid through the said discount. Let’s say that the invoice costs £100,000. The amount that you will receive is £97,500 where the difference of £2,500 is the service fee. Such amount does not compound in value like an interest. It is fixed and paid once. In fact in the event that the owing customer does not pay come the due date, the finance company bears the risk as in a non-recourse setting.

How exactly does single invoice financing improve cash flows? Below is a list to help you understand better:

  • It allows for quick injection of funds into your cash stream and even in as fast as twenty four hours or less making it a good option for emergency needs and expenditures.
  • It converts the receivables into money itself thereby increasing cash inflows. Sometimes even if the company is earning and has high sales such are not indicators of money inflows as part of sales are on credit. By factoring or discounting your invoice the conversion rate from receivable to cash is therefore improved.
  • It only affects the asset portion of your balance sheet or statement of financial position. The accounts receivable account goes down as the cash and cash equivalents account goes up. It does not in any way affect your liabilities making it financial statement friendly.

Landing Yourself Reputable Quality Factoring Companies

When invoice financing is the topic at hand it is expected that factoring and discounting will likely be items up for discussion too. Speaking of factoring, do you actually know what it is? If not allow us to give you a brief explanation. It is a receivables financing option that allows companies to sell their customer invoices to a factor for a discount or fee in exchange for an advance of the value on the said invoices. Here, the receivables portion of the balance sheet is converted to cash even before the plotted sate for which they are to be collected form owing customers. In essence it is a sale of a company’s assets. Today, many businesses make use of such method to improve cash flows, increase capital and decrease doubtful expense to name a few. If you are one of them then it would be best to know the qualities of reputable factoring companies.

factoring companies ukPUNCTUALITY is a must. One of the reasons why companies decide to factor their receivables is to hasten the recognition of cash. If the firm is unable to do so in a timely manner then the very purpose of your actions will be foregone. We all know that time is an important factor in business and those who cannot deliver on time are dead weight.

CUSTOMIZED SERVICES is another. Not all companies belong in the same industry. Not everyone has the same transactions. They don’t sell the exact same products and offer completely parallel services. Businesses differ in one way or another making it a must that your factors should be able to provide you with a service that is personalized and custom built for you. Sure, the policies and other standard procedures will hold steadfast but there will be items that should depend on the company being serviced.

COMPETENT STAFF are necessary. As they say, a company is only as good as the brains behind it. No one can continue walking the path to success with an incompetent team. Make sure that the people and the professionals are indeed skilled and qualified as they say they are. Check for qualifications, licenses and even ask for previous experiences and services.

REASONABLE PRICING is also something to consider when looking for factoring companies. You surely do not want anyone to charge you with a price so high that it becomes so much of a burden. Make sure that they are too are not cheap now but expensive later. Always consider things at the long run.